DOCSLIB.ORG

Loan Use Draft V35

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Loan Use Draft V35 NBER WORKING PAPER SERIES FOLLOW THE MONEY: METHODS FOR IDENTIFYING CONSUMPTION AND INVESTMENT RESPONSES TO A LIQUIDITY SHOCK Dean Karlan Adam Osman Jonathan Zinman Working Paper 19696 http://www.nber.org/papers/w19696 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 December 2013 The authors thank financial support from the Bill and Melinda Gates Foundation, the Consultative Group for Assistance to the Poor (CGAP) and AusAID. The authors thank Kareem Haggag, Romina Kazadjian, Megan McGuire, Faith McCollister, Mark Miller, and Sarah Oberst at Innovations for Poverty Action for project management and field support throughout the project, and the senior management and staff at First Macro Bank and FICO Bank for their support and collaboration throughout this project. The authors retained full intellectual freedom to report and interpret the results throughout the study. All errors and opinions are those of the authors. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2013 by Dean Karlan, Adam Osman, and Jonathan Zinman. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Follow the Money: Methods for Identifying Consumption and Investment Responses to a Liquidity Shock Dean Karlan, Adam Osman, and Jonathan Zinman NBER Working Paper No. 19696 December 2013 JEL No. D12,D92,G21,O12,O16 ABSTRACT Identifying the impacts of liquidity shocks on spending decisions is difficult methodologically but important for theory, practice, and policy. Using seven different methods on microenterprise loan applicants, we find striking results. Borrowers report uses of loan proceeds strategically, and more generally their reporting depends on elicitation method. Borrowers also interpret loan use questions differently than the key counterfactual: spending that would not have occurred sans loan. We identify the counterfactual using random assignment of loan approvals and short-run follow-up elicitation of major household and business cash outflows, and estimate that about 100% of loan-financed spending is on business inventory. Dean Karlan Jonathan Zinman Department of Economics Department of Economics Yale University Dartmouth College P.O. Box 208269 314 Rockefeller Hall New Haven, CT 06520-8629 Hanover, NH 03755 and NBER and NBER [email protected] [email protected] Adam Osman Yale University 27 Hillhouse Avenue New Haven, CT 06511 [email protected] I. Introduction What are the impacts of liquidity shocks on the consumption and investment decisions of households and small businesses? Answers to this question have implications for the theory, practice, and regulation of credit, as well as for modeling intertemporal consumer choice. They shed light on perceived returns to investment, and on the extent to which constraints bind more for some types of household spending than others. Estimating impacts of liquidity shocks matters in many domains, for example in understanding household leveraging and deleveraging decisions in the wake of credit supply shocks,1 as well as evaluating interventions such as business grants,2 unconditional cash transfers,3 and microcredit expansions.4 Papers that track responses to liquidity shocks often focus on estimating medium- and long- term effects by measuring spending patterns, balance sheets, or summary statistics of financial conditions several months or years post-shock. This reduced-form evidence has proven quite useful, but it often leaves the mechanism underlying any change unidentified. For each possible state of the world many months post-liquidity shock -- high enterprise growth relative to baseline, low enterprise growth, consumption growth, etc. -- there are many paths from the liquidity change to that outcome. Identifying mechanisms is important because different paths can have different welfare implications. To take an example closest to the setting we examine in this paper, many microcredit impact evaluations do not find significant effects of microcredit on enterprise scale or profitability one or two years post-intervention, even when the loans are targeted to those who are microentrepreneurs at baseline.5 There are at least three possible explanations for these findings: 1) impacts only materialize over longer horizons due to compounded benefits, adjustment, etc. This hypothesis often motivates researchers and program advocates to highlight the value of longer-term outcome data; 2) microentrepreneurs do not actually invest marginal liquidity in their businesses, perhaps because they are credit constrained on the margin and have household investment or consumption smoothing with a higher expected return on investment (in utility terms) than business investment; 3) microentrepreneurs do invest microloan proceeds in their businesses, but these investments do not end up earning a positive net return. The second and third explanations highlight the value of very short-run data on spending decisions post-shock: “following the money” from liquidity to spending decisions can reveal the 1 See e.g. Hall (2011), Eggertsson and Krugman (2012), and Mian and Sufi (2012). 2 See e.g. Fafchamps et al (2013), Karlan, Knight and Udry (2013), and de Mel, McKenzie and Woodruff (2008). 3 See e.g. Benhassine et al (2013), Blattman, Fiala and Martinez (2012), Haushofer and Shapiro (2013), Karlan et al. (2013). 4 See e.g. Angelucci, Karlan and Zinman (2013), Attanasio et al (2011) , Augsburg et al (2012), Banerjee et al (2013), Crepon et al (2011), Karlan and Zinman (2010), Karlan and Zinman (2011), and Tarozzi, Desai and Johnson (2013). 5 See the studies cited in the previous footnote, with the exception of Karlan and Zinman (2010), which examines untargeted consumer loans. 2 mechanisms underlying the paths from shock to outcomes. If the second explanation is accurate that motivates further attempts to identify causes, consequences, and cures for credit constraints. If the third explanations is accurate that motivates further attempts to understand why entrepreneurs make investments that, ex-post at least, do not yield a positive net return on average (Moskowitz and Vissing-Jorgensen 2002; Anagol, Etang, and Karlan 2013; Karlan, Knight, and Udry 2013).6 To take another example, Mian and Sufi (2011) find that borrowing against rising home values by existing homeowners drove a significant fraction of both the rise in U.S. household leverage from 2002 to 2006 and the increase in mortgage defaults from 2006 to 2008. How did homeowners deploy the borrowed funds? As the paper explains (p.2134): The real effects of the home equity–based borrowing channel depend on what households do with the borrowed money. We find no evidence that borrowing in response to increased house prices is used to purchase new homes or investment properties. In fact, home equity–based borrowing is not used to pay down expensive credit card balances, even for households with a heavy dependence on credit card borrowing. Given the high cost of keeping credit card balances, this result suggests a high marginal private return to borrowed funds. Knowing what sort of spending generates this high marginal private return would inform how economists specify consumer preferences, expectations, and other inputs into consumer choice models. For example, spend data would help distinguish liquidity constraints from self-control problems as drivers of leveraging, which Mian and Sufi highlight as a fruitful avenue for future research (p.2155).7 As both examples suggest, unpacking the mechanisms underlying the long-run effects of a liquidity shock may require data on consumption and investment choices immediately after the shock. If one can follow the money from liquidity shock to spending, it may help identify how households use liquidity to try to improve their lots. But how exactly one might go about measuring spending in the immediate aftermath of a liquidity shock is not immediately obvious, methodologically speaking. There are several challenges. Administrative data is rarely available for the right sample, timeframe, or spending frequency, and even more rarely sufficiently comprehensive in its coverage of different types of consumption and investment. This makes survey design very important. Yet money is fungible, and household and (micro)enterprise balance sheets are often complex, so it may be cognitively difficult for survey respondents to identify the effects of the liquidity shock on their spending, relative to the counterfactual of no shock. Similarly, surveys that simply ask about past purchases 6 Now consider the opposite state of the world: say an evaluation of 12-month impacts does find that a microcredit expansion produces larger, more profitable businesses. The mechanism need not be investment in business assets per se (inventory, physical capital, etc.) Rather, it could be investments in human capital (training, health, child care, etc.) that enable the entrepreneur or business “helpers” from her family to be more productive. 7 For related inquiries see Bauer et al (2012), and Bhutta and Keys (2013). 3 produce noisy data, and measurement error increases with the length of the
Load more

Recommended publications
  • What Happens to Microfinance Clients Who Default?
    What Happens to Microfinance Clients who Default? An Exploratory Study of Microfinance Practices January 2015 LEAD AUTHOR Jami Solli Keeping clients first in microfinance CONTRIBUTORS Laura Galindo, Alex Rizzi, Elisabeth Rhyne, and Nadia van de Walle Preface 4 Introduction 6 What are the responsibilities of providers? 6 1. Research Methods 8 2. Questions Examined and Structure of Country Case Studies 10 Country Selection and Comparisons 11 Peru 12 India 18 Uganda 25 3. Cross-Country Findings & Recommendations 31 The Influence of Market Infrastructure on Provider Behavior 31 Findings: Issues for Discussion 32 Problems with Loan Contracts 32 Flexibility towards Distressed Clients 32 Inappropriate Seizure of Collateral 33 Use of Third Parties in Collections 34 Lack of Rehabilitation 35 4. Recommendations for Collective Action 36 ANNEX 1. Summary of Responses from Online Survey on Default Management 38 ANNEX 2. Questions Used in Interviews with MFIs 39 ANNEX 3. Default Mediation Examples to Draw From 42 2 THE SMART CAMPAIGN Acknowledgments Acronyms We sincerely thank the 44 microfinance institutions across Peru, AMFIU Association of Microfinance India, and Uganda that spoke with us but which we cannot name Institutions of Uganda specifically. Below are the non-MFIs who participated in the study ASPEC Asociacion Peruana de as well as those country experts who shared their knowledge Consumidores y Usuarios and expertise in the review of early drafts of the paper. BOU Bank of Uganda Accion India Team High Mark India MFIN Microfinance Institutions
    [Show full text]
  • The Effects of Microcredit on Women's Control Over Household Spending
    Jos Vaessen Ana Rivas The effects of microcredit on Maren Duvendack women’s control over household Richard Palmer-Jones spending Frans Leeuw Ger van Gils A systematic review Ruslan Lukach Nathalie Holvoet July 2013 Johan Bastiaensen et al. Systematic Finance Review 4 About 3ie The International Initiative for Impact Evaluation (3ie) is an international grant-making NGO promoting evidence-informed development policies and programmes. We are the global leader in funding, producing and synthesising high-quality evidence of what works, for whom, why and at what cost. We believe that better and policy-relevant evidence will make development more effective and improve people’s lives. 3ie systematic reviews 3ie systematic reviews appraise and synthesise the available high-quality evidence on the effectiveness of social and economic development interventions in low- and middle-income countries. These reviews follow scientifically recognised review methods, and are peer- reviewed and quality assured according to internationally accepted standards. 3ie is providing leadership in demonstrating rigorous and innovative review methodologies, such as using theory-based approaches suited to inform policy and programming in the dynamic contexts and challenges of low- and middle-income countries. About this review The effects of microcredit on women’s control over household spending: a systematic review, was submitted in partial fulfilment of the requirements of grant SR1.13 issued under Systematic Review Window 1. This review is available on the 3ie website. 3ie is publishing this report as received from the authors; it has been formatted to 3ie style. All content is the sole responsibility of the authors and does not represent the opinions of 3ie, its donors or its board of commissioners.
    [Show full text]
  • The Impacts of Microcredit: Evidence from Bosnia and Herzegovina †
    American Economic Journal: Applied Economics 2015, 7 1 : 183–203 http://dx.doi.org/10.1257/app.20130272 ( ) The Impacts of Microcredit: Evidence from Bosnia and Herzegovina † By Britta Augsburg, Ralph De Haas, Heike Harmgart, and Costas Meghir * We use an RCT to analyze the impacts of microcredit. The study pop- ulation consists of loan applicants who were marginally rejected by an MFI in Bosnia. A random subset of these were offered a loan. We provide evidence of higher self-employment, increases in inventory, a reduction in the incidence of wage work and an increase in the labor supply of 16–19-year-olds in the household’s business. We also pres- ent some evidence of increases in profits and a reduction in consump- tion and savings. There is no evidence that the program increased overall household income. JEL C93, G21, I38, J23, L25, P34, P36 ( ) substantial part of the world’s poor has limited, if any, access to formal sources A of credit. Instead, they depend on informal credit from expensive moneylenders or have to borrow from family and friends Collins et al. 2010 . Such credit rationing ( ) may constrain entrepreneurship and keep people trapped in poverty. Microfinance, pioneered by the Bangladeshi Grameen Bank, aimed to deal with this issue in a sustainable fashion. A key research and policy question is whether the availability of credit for the more disadvantaged can reduce poverty. We address this question by analyzing the results of an experiment where we ran- domly allocated loans at the individual level to a subset of applicants considered too ( ) risky and “unreliable” to be offered credit as regular borrowers of a well-established microfinance institution MFI in Bosnia and Herzegovina.
    [Show full text]
  • Microfinance, Grants, and Non-Financial Responses to Poverty Reduction: Where Does Microcredit Fit?
    FocusNote NO. 20 REISSUED DECEMBER 2002 MICROFINANCE, GRANTS, AND NON-FINANCIAL RESPONSES TO POVERTY REDUCTION: WHERE DOES MICROCREDIT FIT? This note was written for audiences from development specialties outside the financial sector to provide guidance on where microfinance is most appropriate, and where complementary and alternative interventions are more effective. It looks at microcredit as one element among many on a menu of possible interventions to gener- The Focus Note Series is ate income and employment, and alleviate poverty, including temporary poverty in CGAP’s primary vehicle for post-crisis situations and longer-term hardcore poverty. This perspective should make it dissemination to governments, easier to see how microcredit relates to other financial and non-financial interventions, donors, and private and financial institutions on best practices in and to select a package of tools that are likely to work best in each specific situation. The microfinance. discussion addresses five questions: Please contact FOCUS, ■ When is microcredit an appropriate response? CGAP with comments, ■ What is needed for successful microcredit? contributions, and to receive other notes in the series. ■ When would savings and other financial services be more beneficial? ■ When should grants and other financial entitlements be considered? 1818 H Street, NW ■ Washington DC 20433 What other interventions can strengthen the economic position of the poor? Tel: 202 473 9594 Introduction Fax: 202 522 3744 “Microfinance” refers to provision of financial services—loans, savings, insurance, or E-mail: transfer services—to low-income households. In the last two decades, practitioners have [email protected] developed new techniques to deliver such services sustainably.
    [Show full text]
  • Community Development Micro Loan Funds
    TOOLK IT COMMUNITY DEVELOPMENT MICRO LOAN FUNDS Community Economic Development Toolkit Disclaimer This fact sheet was produced by the California Community Economic Development Association, in partnership with the Community Action Partnership National Office, as part of the U.S. Department of Health and Human Services, Office of Community Services. The “Community Economic Development” publication series is designed to increase the knowledge of processes for community economic development projects nationwide. The contents of this manual are presented as a matter of information only. Nothing herein should be construed as providing legal, tax, or financial advice. The materials referenced and the opinions expressed in this product do not necessarily reflect the position of the U.S. Department of Health and Human Services, Office of Community Services, and no official endorsements by that agency should be inferred. Support for the Community Economic Development project and this toolkit is provided by the Department of Health and Human Services Administration for Children and Families, Office of Community Services (OCS), grant award number: 90ET0426/01. Entire contents copyright © 2012 Community Action Partnership. All rights reserved. COMMUNITY DEVELOPMENT MICRO LOAN FUNDS Use of this Guide The Community Development Micro Loan Fund Guide is intended for use by community development organizations for the following purposes: 1. Organizations wanting to learn about Micro Loan Funds 2. Organizations creating alternative lending and investment programs 3. Organizations seeking services and capital from Micro Loan Funds NOTE: For purposes of this guide, focus will be on business lending (to start, expand or invest in business development) and to a lesser degree on personal loans (home, auto or educational loans).
    [Show full text]
  • The Application of Microcredit Technology to the UK: Key Commercial and Policy Issues
    The Application of Microcredit Technology to the UK: Key Commercial and Policy Issues by Rosalind Copisarow ABSTRACT: This article addresses the following issues: who needs microcre- dit in the UK, what is the extent of the unmet demand across the country, what are the precise terms and conditions required by microentrepreneurs, how repayment rates of at least 95% can be expected, and how an institu- tion making microcredits can become self-financing within six years. The article also describes the main barriers faced by microcredit institutions in the UK and offers solutions to obtaining funds from the private, public, and voluntary sectors and to operating within a legal and regulatory framework that permits microcredit institutions to serve their clients with the products that they need. Finally, the article examines the social and economic impact that can be expected from microcredit, at an individual client level, at a local community level, and at a national level. In the UK, there are approximately 500,000 microenterprises. These are tiny businesses which have no more than five employees. Only about 3% to 4% of them, however, are able to obtain credit from all the commer- Journal of Microfinance cial, government, and voluntary sector sources combined. Microfinance provides such enterprises with access to capital for as long as they need it. It thereby acts as a financial “partner,” supporting their development into mainstream banking. This is achieved through a series of incremen- tal loans for working capital or investment purposes. The UK is not alone in being so underserved. Microfinance in the whole industrialized world is at present hardly existent, and certainly not in a way that is capable of making a significant impact on an affordable, long-term basis.
    [Show full text]
  • GAINING SCALE in MICROCREDIT Can Banks Make It Happen?
    GAINING SCALE IN MICROCREDIT Can banks make it happen? A report on two workshops organised by the Directorate-General for Enterprise and Industry European Commission Enterprise and Industry GAINING SCALE IN MICROCREDIT Can banks make it happen? A report on two workshops organised by the Directorate-General for Enterprise and Industry European Commission Enterprise and Industry ENTERPRISE & INDUSTRY MAGAZINE The Enterprise & Industry online magazine (http://ec.europa.eu/enterprise/e_i/index_en.htm) covers issues related to SMEs, innovation, entrepreneurship, the single market for goods, competitiveness and environmental protection, better regulation, industrial policies across a wide range of sectors, and more. The printed edition of the magazine is published three times a year. You can subscribe online (http://ec.europa.eu/enterprise/e_i/subscription_en.htm) to receive it — in English, French or German — free of charge by post. This publication is fi nanced under the competitiveness and innovation framework programme (CIP) which aims to encourage the competitiveness of European enterprises. Europe Direct is a service to help you fi nd answers to your questions about the European Union Freephone number (*): 00 800 6 7 8 9 10 11 (*) Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed. More information on the European Union is available on the Internet (http://europa.eu). Cataloguing data can be found at the end of this publication. Luxembourg: Publications Offi ce of the European Union, 2010 ISBN 978-92-79-14433-2 doi:10.2769/36362 © European Union, 2010 Reproduction is authorised provided the source is acknowledged.
    [Show full text]
  • The Impacts of Microcredit: Evidence from Ethiopia†
    American Economic Journal: Applied Economics 2015, 7(1): 54–89 http://dx.doi.org/10.1257/app.20130475 The Impacts of Microcredit: Evidence from Ethiopia† By Alessandro Tarozzi, Jaikishan Desai, and Kristin Johnson* We use data from a randomized controlled trial conducted in 2003–2006 in rural Amhara and Oromiya Ethiopia to study the impacts of increasing access to microfinance( on a) number of socioeconomic outcomes, including income from agriculture, animal husbandry, nonfarm self-employment, labor supply, schooling and indicators of women’s empowerment. We document that despite sub- stantial increases in borrowing in areas assigned to treatment the null of no impact cannot be rejected for a large majority of outcomes. JEL G21, I20, J13, J16, O13, O16, O18 ( ) eginning in the 1970s, with the birth of the Grameen Bank in Bangladesh, Bmicrocredit has played a prominent role among development initiatives. Many proponents claim that microfinance has had enormously positive effects among borrowers. However, the rigorous evaluation of such claims of success has been complicated by the endogeneity of program placement and client selection, both common obstacles in program evaluations. Microfinance institutions MFIs typi- ( ) cally choose to locate in areas predicted to be profitable, and or where large impacts / are expected. In addition, individuals who seek out loans in areas served by MFIs and that are willing and able to form joint-liability borrowing groups a model often ( preferred by MFIs are likely different from others who do not along a number of ) observable and unobservable factors. Until recently, the results of most evaluations could not be interpreted as conclusively causal because of the lack of an appropriate control group see Brau and Woller 2004 and Armendáriz de Aghion and Morduch ( 2005 for comprehensive early surveys .
    [Show full text]
  • Microfinance Barometer 2019 3 Financial Inclusion | Europe
    MICROFINANCE BAROMETER 2019 IN PARTNERHIP WITH 10th Edition 10 YEARS ALREADY! v A LOOK BACK AT THE TRENDS IN MICROFINANCE Content PAGES 2-3 vvv KEY FIGURES OF FINANCIAL INCLUSION IN THE WORLD PAGES 4-5 KEY FIGURES OF FINANCIAL INCLUSION IN EUROPE & FRANCE PAGES 6-13 SPECIAL REPORT: TRENDS AND EVO- LUTIONS OF MICROFINANCE OVER THE LAST10 YEARS PAGES 14-15 MICROFINANCE AND RESILIENCE TO CLIMATE CHANGE PAGE 16 HOW DOES MICROFINANCE HELP REFUGEE INTEGRATION © Advans Group point. Over-indebtedness of some a number of financial and non-fi- quires all investors to mobilise to of microfinance’s beneficiaries nancial services. In 2016, one year build a more sustainable world. EDITORIAL and the excessive profits gene- after the adoption of the Sustai- rated by microfinance institutions nable Development Goals (SDGs), This new Barometer thus looks (MFIs) paved the way to waves the Barometer points out that back at the developments in mi- Despite positive transformations of criticisms against the sector. microfinance promotes access to crofinance over the past ten years in recent years, microfinance These episodes have revealed the credit, but also to health, agricul- to highlight the evolutions of the is sometimes misunderstood or dangers of an unchecked microfi- ture, education, energy and hou- sector. Expertise in creating tools poorly perceived by the public nance and the impact it can have sing services. and indicators to measure social opinion and by economists. Today, on its beneficiaries when it is not performance, the responsible use for its 10th anniversary, the Micro- managed responsibly. Self-regu- For 10 years, these Barometers of new technologies, the diversi- finance Barometer proposes to latory measures have since then have focused on honestly ana- fication of services (financial and consider microfinance as an en- been developed and ameliorated, lysing the transformation of mi- non-financial) to include the most tire segment of development po- demonstrating a willingness to crofinance.
    [Show full text]
  • Microcredit, Financial Literacy and Household Financial Distress
    Microcredit, financial literacy and household financial distress Joeri Smits, Isabel G¨unther Chair of Development Economics, ETH Zurich, Zurich, Switzerland. Abstract This paper studies the effect of microcredit uptake on household financial dis- tress. Drawing on quasi-experimental survey data collected in urban Uganda, merged with bank administrative data on the same individuals, we find that on average, microcredit uptake increases financial distress. The average impacts, however, conceal fundamental heterogeneity in treatment effects for different subpopulations. The financial distress-response to microcredit uptake is driven by borrowers whose financial literacy skills are low, and we are unable to reject the null of no impact for those with higher levels of financial literacy. Borrow- ers with low financial literacy levels take on loans (and installments) that are larger relative to their income. These findings are explained by a simple model of stochastic choice that incorporates financial literacy, and they suggest a role for numeracy skills assessment in credit scoring of loan applications. Keywords: microcredit, financial distress, financial literacy, Uganda 1. Introduction Whereas the spread of microfinance has relaxed credit constraints in many countries, concerns have increasingly been voiced about potential overborrowing IThis research was supported by the Financial Cooperation Independent Evaluation Unit of the KfW Development Bank. We thank Eva Terberger, Franziska Sp¨orri,Thomas Gietzen, Martin Brown, Vincent Somville, Thilo Klein, Stefan Klonner, Furio Rosati, Ethan Ligon, Marcel Fafchamps, Ad´anL. Martinez Cruz, Asim Khwaja, Daniel Rozas, and numerous sem- inar and conference participants for helpful comments. Any errors are of course, our own. Preprint submitted to - March 6, 2017 by the poor (e.g.
    [Show full text]
  • The Importance of Microcredit Programs in Sustainable Development
    Special Reports The Importance of Microcredit Programs in Sustainable Development overty alleviation is one of the primary goals of with no income or work opportunities. Because of the Pdeveloping countries and international assistance credit risks and relatively high costs associated with agencies. The eradication of poverty and the promo- small loans, the traditional banking system is general- tion of sustainable development represent two of the most important challenges facing the world in the 21st century. Under sustainable development all An International Success Story: human beings will have the opportunity to satisfy Grameen Bank their basic needs in an appropriate way, to enjoy equal access to resources, to have a say in the social Dr. Yunus established Grameen Bank in and economic development process as it affects them, 1983 in Bangladesh, with the goal of assisting and to participate in political decision making. the disadvantaged by providing deposit and At the 2002 World Summit in Johannesburg, microcredit services for individual customers South Africa, participants reached a consensus to and groups. The bank promotes the concept of reduce the number of people in the world living on savings, which reduces the reliance on outside less than US$1 per day by 50 percent by the year funds. It also offers microcredit through group 2015. Representatives of 189 nations attending the loans, which not only abolishes the need for conference reiterated their desire to help two billion collateral but also reduces costs. To date, the people around the world emerge from the depths of bank has experienced a high savings rate and poverty.
    [Show full text]
  • Microfinance Revolution
    23250 v 1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized The Microfinance Revolution Sustainable Finance for the Poor © 2001 by the International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, NW, Washington, D.C. 20433 USA All rights reserved Manufactured in the United States of America First printing May 2001 The findings, interpretations, and conclusions expressed in this book are entirely those of the author and should not be attributed in any manner to Open Society Institute or to the World Bank, its affiliated organizations, or members of its Board of Executive Directors or the countries they represent Library of Congress Cataloging-in-Publication Data Robinson, Marguerite S., 1935– The microfinance revolution: sustainable finance for the poor / Marguerite S. Robinson. p. cm. Includes bibliographical references. ISBN 0–8213–4524–9 1. Microfinance—Developing countries. 2. Microfinance. 3. Financial institutions—Develop- ing countries. 4. Poor—Developing countries. I. Title. HG178.33.D44 R63 2001 332.2—dc21 2001026146 Edited, designed, and laid out by Communications Development Incorporated, Washington, D.C. and San Francisco, California The Microfinance Revolution Sustainable Finance for the Poor Lessons from Indonesia The Emerging Industry Marguerite S. Robinson The World Bank, Washington, D.C. Open Society Institute, New York Praise for The Microfinance Revolution “Dr. Robinson has written a magnificent work that provides a jolt of energy as well as wise guidance to the fledgling microfinance industry.This book will quickly become re- quired reading for students and professionals in and around the microfinance industry, for donors and government agencies, and for investors.This is also the first book that, through thoughtful analysis, vivid images, and extensive research, will beckon commer- cial bankers and the rest of the ‘real world’ to sit up and take interest in microfinance.
    [Show full text]